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The special ones

Those of you who have talked football with me know that I support Partick Thistle. Some years ago we found ourselves intertwined with the ubiquitous Ken Bates. Luckily, we escaped but for some time we had the services of the Chelsea reserves as and when needed. As such, I have to admit to an interest in the Blues and this week’s management change caught my attention, briefly supplanting the Northern Rock issue.

My walk to work in the morning takes me past a branch of Northern Rock so the panic created by the recent market problems was there for me to see.

I have to ask what happened to the non-execs on the Northern Rock board. Were they asleep or did they just not pay attention?

The other issue is the disparities between the compensation scheme for banks v other retail investments. There can be no reason for this being corrected as soon as possible.

The indecent rush to reassure investors at Northern Rock can be contrasted with the position taken on Equitable Life but, more important, the total lack of effective action on final-salary schemes.

What I cannot fathom is why there is a difference between two people where one has saved in a deposit account and another has saved in a pension. The latter is nine times out of 10 more dependent on the income it produces, so why has their plight been so casually dismissed?

The whole episode simply underlines the need for financial education i the UK. If the public were more informed then this market turbulence would not affect them as it has done these last few weeks.

I believe that IFAs can and should educate their clients before they make any recommendations,

I recently visited a practice in San Francisco which does just that. When they take on a client, they have to agree to attend a series of education sessions which allows the firm to ensure they can reach agreement over investment policies, etc, or the client could be agreeing simply to bring the meeting to a close.

As we seek to add value, this approach has increasing merit and certainly helps in the transition to fees for those still principally on commission.

Through educating clients, I contend that we can build trust and create and sustain longer-lasting arrangements.

Recent events have shown that the regulator’s approach to education is missing the target and that is a serious issue. Just as the FSA enlisted IFAs to take part in the workplace education project, surely we need the same approach to support us in education for the public at large?

We need the issue of savings, etc, to be a core topic for all individuals . Until then, we will struggle to solve many of the problems that will become evident when the capacity to earn has gone or, at best, has diminished.

The loss of the “special one” is notable but not as notable as the public’s lack of confidence in the Bank of England, the FSA and the current Government and not necessarily in that order.

I suspect that, if asked if the people who queued outside Northern Rock branches were asked if they had a financial adviser they trusted, then many would say yes.

Given the assumed premises behind the retail distribution review it makes you think, does it not?


Swing of things

Amid recent turmoil in world stockmarkets, advisers are quite rightly recommending investors to diversify into assets other than equities. The property market is looking less profitable than it was and bonds are still unattractive so where do investors go?

Keep calm after the storm

Apologies for the crass use of a classic REM song but It’s The End Of The World As We Know It (And I Feel Fine) sums up the situation at present. If the prophets of doom are to be believed, in a month’s time, the market will be in meltdown and some major lenders will be no more.

Wave caps maximum buy-to-let LTV at 85 per cent

Wave has announced a number of criteria changes including reducing buy-to-let maximum loan to values from 90 per cent to 85 per cent.New build maximum LTVs on new build flats is being reduced from 85 per cent to 75 per cent. The maximum LTV on new build houses is being reduced from 90 per cent […]

ETF Securities looks forward to the future

ETF Securities has added to its range of exchange traded commodities on the London Stock Exchange, giving investors access to commodities to commodity futures prices linked to the Dow Jones-AIG Commodity 3 Month Forward Indices.


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